Terumo Corporation · TSE:4543
Terumo — Q1 FY2024 Earnings Presentation
26 slides from Terumo's earnings presentation, Aug 8, 2024
Slide 1: Financial Results for the First Quarter of Fiscal Year Ending March 31, 2025 (FY2024)
Financial Results for the First Quarter of Fiscal Year Ending March 31, 2025 (FY2024) Aug 8, 2024 Jin Hagimoto Chief Financial Officer Terumo Corporation I'm Hagimoto, Terumo's CFO. This presentation will provide an overview of the financial results for the first quarter of the fiscal year ending Ma
Slide 2: Forward-Looking Statements and Use of Document
Forward-Looking Statements and Use of Document Among the information that Terumo discloses, the forward-looking statements including financial projections are based upon our assumptions using information available to us at the time and are not intended to be guarantees of future events or performanc
Slide 3: Highlights
Highlights Revenue Highest ever result for a quarter Demand continued across all companies, which together with foreign exchange contributed to company-wide growth of +19.9% Operating Profit Operating income and net income both reached record quarterly highs Growth outpaced that of sales due to appr
Slide 4: P&L
P&L Revenue: Strong inherent growth in all companies, plus effects of pricing measures and one-time factors Operating Profit: Improved profit margins due to contributions from increased sales and appropriate cost control Change 100M JPY FY23 Q1 FY24 Q1 Change excluding FX impact Revenue 2,153 2,582
Slide 5: OP Variance Analysis (Q1): Sustained demand contributing to increased sales
OP Variance Analysis (Q1): Sustained demand contributing to increased sales (100M JPY) G/P increment by sales increase: Driven by C&V, mainly TIS and Neuro Price Gross +24 FX Gross margin: SG&A R&D Mitigation of inflationary and cost reduction margin Reimbur- increase increase effects sement price P
Slide 6: SG&A increase and FX effects
The "SG&A increase" is a healthy increase due to business expansion and is in line with planned figures. "FX" were +3.8 billion yen in flow and +2.5 billion yen in stock. 2.2 billion of this +2.5 billion yen increase in stock is the effect of a change from this fiscal year in the exchange rate used
Slide 7: Change to Exchange Rate Used for Elimination of Unrealized Gains on Inventory
Change to Exchange Rate Used for Elimination of Unrealized Gains on Inventory Objective: Taking into account the recent volatilities in exchange rates, to avoid large fluctuations in business results based on closing rates Change: Exchange rate used for elimination of unrealized gain on inventory he
Slide 8: Effect of exchange rate change on gross profit
As a result, due to the depreciation of the JPY, we have recorded an uplift of 2.2bil yen. This change will not contribute to raising profitability at all times, but we believe will contribute to stabilizing the impact of foreign exchange rates to our profitability. Next slide, please. 6
Slide 9: Revenue by Region: Steady progress in all regions
Revenue by Region: Steady progress in all regions, with transient demand also contributing C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies, TIS: Interventional Systems, Neuro: Neurovascular, CV: Cardiovascular, HCS: Hospital Care Solutions, LCS: Life Care S
Slide 10: Regional commentary: Europe, China, emerging markets
leading to a steady progress in Pharmaceutical Solutions. In Europe, cardiovascular, neurovascular and vascular grew at double-digit rates, excluding exchange rate effects. In blood and cell technology, the blood center business and apheresis therapy performed well. C&V led the way in China. Neuro s
Slide 11: C&V: Both sales and profits exceeded planned figures
C&V: Both sales and profits exceeded planned figures, driven by Europe and the U.S. (C&V: Cardiac and Vascular, TIS: Interventional Systems, Neuro: Neurovascular, CV: Cardiovascular) （100M JPY） Q1 Q1 Comments YoY ( ) FX Neutral 1,567 TIS : US saw double-digit growth, even when excluding +148 1,306 e
Slide 12: C&V profit commentary
Profits increased due to an increase in sales, including one- time factors, as well as the effects of profit improvement measures and steady progress in controlling SG&A expenses. Next slide, please. 8
Slide 13: TMCS: Revenues and profits increased due to pricing measures
Revenues and profits increased due to the effects of pricing measures, TMCS: including sales increases due to one-time factors (TMCS: Medical Care Solutions) （100M JPY） Q1 Q1 Comments YoY ( ) FX Neutral 518 HCS : In Japan, revenues increased due to the effect of pricing +46 460 437 Hospital Care mea
Slide 14: TMCS profit commentary
These increases in sales and the effects of pricing measures resulted in an increase in profit. Next slide, please. 9
Slide 15: TBCT: Sales expanded due to strong blood center business
TBCT: Sales expanded due to strong performance by the blood center business (TBCT: Blood and Cell Technologies) （100M JPY） Q1 Q1 Comments YoY ( ) FX Neutral Blood Center : Strong sales of apheresis collection systems and +65 497 Solutions whole blood collection-related products in US and 409 Europe.
Slide 16: Awareness of the Current Environment
Awareness of the Current Environment No change Unstable Fundamentals Inflation Generally sound Easing inflation also requires close monitoring Demand and growth potential remain favorable (raw materials, transportation, energy, etc.) Unstable Accelerating Exchange rate fluctuations Group strategy Wi
Slide 17: GS26 portfolio optimization and corporate venture capital
GS26, we will thoroughly re-examine our business portfolio, and then work to rapidly optimize it. In addition, as part of our efforts to strengthen innovation, we have begun corporate venture capital activities. This will accelerate the speed with which we can acquire new technologies and create an
Slide 18: Reference
Reference ©TERUMO CORPORATION 12 12
Slide 19: P&L (QoQ)
P&L (QoQ) (100M JPY) FY23 Q1 Q2 Q3 Q4 FY24 Q1 (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) Revenue 2,153 2,286 2,391 2,389 2,582 Gross Profit 1,098 (51.0%) 1,185 (51.8%) 1,266 (52.9%) 1,243 (52.0%) 1,376 (53.3%) SG&A Expenses 651 (30.2%) 664 (29.0%) 707 (29.6%) 737 (30.9%) 748 (29.0%) R&D Expen
Slide 20: SG&A (QoQ)
SG&A (QoQ) (100M JPY) FY23 Q1 Q2 Q3 Q4 FY24 Q1 (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) Salaries & Wages 336 349 371 373 398 Sales Promotion 49 44 54 54 52 Logistical Costs 47 46 49 51 51 Depreciation and Amortization 58 61 65 66 70 Others 161 164 168 192 178 SG&A Expenses 651 664 707 737 7
Slide 21: SG&A (YoY)
SG&A (YoY) (100M JPY) YoY% FY23 Q1 FY24 Q1 YoY YoY% excluding FX impact Salaries & Wages 336 398 62 18% 7% Sales Promotion 49 52 3 6% -2% Logistics Costs 47 51 4 6% -2% Depreciation and 58 70 12 21% 9% Amortization Others 161 178 17 10% 2% SG&A Expenses Total 651 748 97 15% 5% （%） (30.2%) (29.0%) R&
Slide 22: Adjusted Operating Profit: Adjustments
Adjusted Operating Profit: Adjustments (100M JPY) FY23 Q1 FY24 Q1 Adjusted Operating Profit 345 511 Adjustment 1. Amortization of -46 -56 acquired intangible assets Adjustment 2. Non-recurring profit or loss -2 -9 Operating Profit 296 446 <General examples of adjustment items> • Acquisition related
Slide 23: CAPEX, Depreciation and Amortization, R&D Expenses
CAPEX, Depreciation and Amortization, R&D Expenses (100M JPY) FY24 FY21 FY22 FY23 FY24Q1 Guidance CAPEX 692 758 784 147 930 Depreciation and Amortization 532 635 702 192 770 Amortization of 161 188 200 56 200 acquired intangible assets Others 371 447 502 136 570 CAPEX = Construction in progress reco
Slide 24: Cash Flows (Q1)
Cash Flows (Q1) Operating CF Investing & Financing CF (100M JPY) +357 -457 210 182 Debt Income 127 Repayment* Depreciation Issuance of Bonds, taxes, etc. Working 147 188 163 456 and Proceeds from amortization capital CAPEX borrowings gains and losses 162 3 Profit before tax Dividends Others 1,349 15
Slide 25: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (Flow) (100M JPY) USD EUR CNY Revenue 25 11 39 Adjusted Operating Profit 1 5 23 Impact of 1 JPY depreciation (Stock) USD EUR CNY Adjusted Operating Profit -2.5 -0.6 -2.0 ©TERUMO CORPORATION 19 19
Slide 26: ~“TERUMO
~“TERUMO 20